The Proposed WTO IP Waiver: Just What Good Can It Do? -- An Analysis

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As posted Monday, BIO (the Biotechnology Innovation Organization) provided a link to the supposed compromise agreement reached recently to permit WTO member states to waive patent protection for "subject matter required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic."  The effects of such a waiver are being debated by those against it (mostly members of industry having vaccine-related IP protection and industries making vaccines) and in favor (NGOs, such as Médecins Sans Frontières) and, of course, the governments who seek to benefit, starting with the waiver's sponsors, India and South Africa.

The proposed waiver sounds patent-centric, but the devil as usual is in the details (see "If the Devil of the WTO IP Waiver Is in the Details, What Are the Details?").  For example, while the waiver states that a member state can permit "use of patented subject matter required for the production and supply of COVID-19 vaccines without the consent of the right holder to the extent necessary to address the COVID-19 pandemic," in a footnote the term "patented subject matter" is substantially broadened to include "ingredients and processes necessary for the manufacture of the COVID-19 vaccine" (emphasis added).  The rights the waiver gives a member state are expressly not limited to compulsory licenses of patents in the member's jurisdiction, but include "executive orders, emergency decrees, and judicial or administrative orders" as well as undefined "other acts."  These acts or decrees are themselves not limited to internal use in a member state, but also can include "any proportion of the authorized use to be exported to eligible Members and to supply international or regional joint initiatives that aim to ensure the equitable access of eligible Members to the COVID-19 vaccine covered by the authorization" (emphasis added; wherein the italicized portion of the proposal is not defined).

But as these considerations suggest, while a dramatic development (after all, the proposal was scheduled to come to a vote last fall), patent rights waivers are not the entirety of IP-related provisions in the proposal nor ones needed if indeed the sponsors intend to remove actual impediments to more widespread vaccine distribution, particularly in low- and middle-income countries.  The details of COVID vaccine production have been set out in various news sources (see Neuberg et al., "Exploring the Supply Chain of the Pfizer/BioNTech and Moderna COVID-19 Vaccines"; Weiss et al., "A COVID-19 Vaccine Life Cycle: From DNA to Doses," USA Today, Feb. 7, 2021; King, "Why Manufacturing Covid Vaccine to at Scale Is Hard," Chemistry World, Mar. 23, 2021; Cott et al., "How Pfizer Makes Its Covid-19 Vaccine," New York Times, April 28, 2021) and in the scientific literature (see Lowe, "Myths of Vaccine Manufacturing," Science Translational Medicine, February 2021).  But these are certainly not disclosed in the detail necessary for commercial production, and the complexities of production are illustrated in graphics from the Times article, wherein the DNA is prepared in Chesterfield, MO and shipped to Andover, MA for mRNA production; then the mRNA shipped back to Chesterfield or Kalamazoo, MI for packaging into the vaccine nanoparticles; and then sent back to Andover for testing before release.  While some of this complexity may be company-specific, it also represents the different technological requirements for preparing an effective vaccine.

It is evident that, in the relative dearth of patents involved in COVID vaccine preparation to date, the disclosures needed to reproduce these vaccines (no matter how difficult that may be in practice) are not patent protected (with some notable exceptions that have raised the specter of patent infringement litigation against major vaccine makers in the U.S.).  Most of the "know-how" necessary to implement actual vaccine production involves trade secrets, many of which are not limited to COVID-19 vaccines (for example, producing the lipid nanoparticles in which the Pfizer and Moderna mRNA vaccines are encapsulated).  Under the terms of the proposed waiver, the question will be whether the U.S. will compel disclosure of trade secrets owned by U.S. companies or that have disclosed them in confidence to the extent such secrets are part of regulatory filings.  Either action would constitute a "taking" under the Fifth Amendment ("Nor shall private property be taken for public use, without just compensation"); see Epstein et al., "The Fifth Amendment Takings Clause," Interactive Constitution: Common Interpretation.  Seemingly simple and straightforward, almost every word in the clause is open to interpretation, none perhaps as much as determining what "just compensation" entails.  It is likely that, should the government act peremptorily with regard to takings of trade secrets justified by any WTO waiver clause, the effect on trade secrets rather than patent waivers will carry the greatest consequences and cause the most controversy.  Indeed, the prospects arising therefrom are likely some of the biggest impediments towards effectuating any waiver in a manner that could have any chance of achieving the stated goal of facilitating COVID vaccine production.

Those impediments generally involve the global inequalities in access to medicines, including vaccines. The negative consequences of the inequities between the developed world and everyone else on both global public health and the intellectual property regime are not now just being appreciated (seee.g., "A Modest Proposal Regarding Drug Pricing in Developing Countries"; "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries"; "Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing"; and "Worldwide Drug Pricing Regime in Chaos") but like many issues the COVID-19 pandemic has raised the temperature on the debate.  And the fact is that it is unlikely that most of the countries in favor of the waiver (except perhaps India and South Africa) have the technological infrastructure for producing the vaccine.  Thus in the short term the waiver can be expected to do little to solve the actual problem of vaccinating the world (or at least that portion that are not convinced the vaccine is unnecessary, harmful, or an infringement on their freedoms).  There have been some, small measures taken to address the distribution problem; for example, both Pfizer and BioNTech agreed to work with South Africa's Biovac Institute to produce their mRNA vaccine locally (see "Is This the WTO Waiver End Game? Pfizer and BioNTech Agree to Vaccine Technology Transfer with South Africa's Biovac Institute").  There have been efforts to export doses from "have" to "have not" countries (see, for example, Evenett et al., 2021, "The COVID-19 Vaccine Production Club: Will Value Chains Temper Nationalism?", World Bank Policy Research Working Paper 9565, 2021).  But perhaps more productive routes to achieving these solutions would be better focused on 1) open and resilient global supply chains; 2) further cooperation between industry players to ramp up production; 3) strengthened financing and sharing of vaccines for middle- and low-income countries; and 4) regulatory approval of new vaccines.  The motivations for such efforts need not (and do not) rely exclusively on altruism.  As has become evident, the virus has the capacity to mutate in ways that variants can arise having unknown resistance to current vaccines.  Vaccines, particularly the mRNA-base vaccines, may not be effective against these variants and thus it is in everyone's interest to extend vaccination globally (regardless of how daunting that challenge may be) to reduce the probability of such variants arising.

The efforts being applied globally to develop vaccines, treatments, and better tests and technology in response to COVID-19 have been impressive.  Intellectual property protection has played an important role in these efforts.  Past experience and recent developments suggest that protecting IP for vaccines, therapies, and technologies to fight COVID-19 has had and could continue to have a positive impact, and advance the cause of eradicating, or at least treating and preventing, this disease.  It would be foolish to ignore these contributions by reducing their effectiveness with the proposed waiver, particularly when the precise scope (with regard to trade secret aspects at least) is either undefined or effectively unlimited.  The pandemic has produced a great deal of anxiety about what happens "the next time" there is a pandemic.  This waiver raises the very real possibility that we will be less likely to be able to face such a future challenge because those with the capacity, incentive, and economic wherewithal to do so will have left the field to pursue other opportunities.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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